The Employment Appeal Tribunal has today rejected an Employment Tribunal’s judgment that actors engaged under a profit sharing arrangement are “workers” and therefore entitled to the minimum wage. The Appeal Tribunal has held that the original judgment, which was backed by the actors’ union Equity and widely publicised as a ‘test case’, failed to apply the correct legal test.
The play at the heart of this dispute was a fringe theatre production of David Edgar’s ‘Pentecost’ staged at St Leonard’s Church, Shoreditch, in spring 2012. 26 actors were involved in the production, all of whom agreed, in advance, to participate in the production on the basis of a ‘profit share’ (whereby 60% of any profits generated were to be distributed evenly amongst the cast).
Despite achieving critical acclaim in the press and award nominations for the cast and director, the production lost money and as such there was no profit to share. Four cast members, with the support of Equity, submitted claims to the Employment Tribunal for pay and holiday pay, citing minimum wage legislation. The claims were brought against the director and producer Gavin McAlinden (trading as ‘Charm Offensive Productions’).
Paul Jennings, a lawyer from the city law firm Bates Wells Braithwaite who acted on behalf of Mr McAlinden commented: “The original judgment was flawed. It failed to evaluate whether or not actors are self-employed professionals. But there is a wider point to this appeal. Clearly the national minimum wage, and the living wage, are exceptionally important and the exploitation of workers is unacceptable. But profit sharing, in the true sense, does not involve exploitation. It is extremely common for artists to collaborate and agree to work on the basis that they will share any profits generated. Requiring a director, choreographer or conductor to pay the minimum wage in circumstances where there is no independent funding and the participants have agreed in advance to a profit share arrangement runs the risk of stifling fringe theatre and other collaborative artistic projects.”
In order to qualify for the National Minimum Wage, it is necessary to be a ‘worker’ (as defined by statute). However, self-employed professionals who advertise and market their services are not considered workers and, as such, do not qualify for the minimum wage. In this case the Appeal Tribunal found that the Employment Tribunal had failed to consider whether or not the actors are in fact self-employed professionals, as opposed to workers.
Paul Jennings continued: “Employment status is an extremely important area of the law – it determines the rights and protections available and can have profound implications in relation to, for example, tax liability. In the last three years alone the Court of Appeal and the Supreme Court have had to decide the employment law status of volunteers, lap dancers and Methodist preachers. Given the complexities in this area of law, it is little wonder that the status of actors proved to be problematic. This judgment, however, provides valuable guidance.”
This case will now be sent back to a fresh Tribunal for re-consideration. His Honour Judge David Richardson, delivering the judgment, stated: “It is no doubt true that some of the Claimants were just starting out on what they hoped would be acting careers. The question, however, still arises: upon what were they embarking? Was it a profession or business undertaking (or both); if they were actively marketing their services as an independent person to the world in general, picking up or attempting to pick up work … from a variety of sources, this may be a powerful indication that they were not ‘workers’.”
Posted on 17/10/2014 in BWB NewsBack to Knowledge